Rolling US Economy Into The Shitbin Thread

i have a hard time believing this situation can really resemble an event 80 or a 170 years ago too much

I dunno, all the basics are there: human nature, greed, people in over their heads, shitloads of cash at stake

sure but those qualities are too general to be prescriptive or particularly useful in any way

...black people involved in the rainbow of politics

lol did anyone read the steve coll post i linked? basically i think improved regulation/greater transparency of derivative markets as well as continued gov't intervention is the only way to mitigate right now? part of the problem is surely pyschological rather than structural and finding a way to put a known value on the losses will do more to restore equilibrium than anything else

(xposts) yeah, he doesn't know. but the fact that he's gone totally zen, and that, despite knowing the market and the variables involved as well as almost anyone, he is clueless about how this will/can end, make his non-predictions somewhat alarming.

bubbles and panics have a lot of things in common. I mean, the standard wisdom on the great depression is that it was exacerbated by government inaction. Yet this time they're acting all over the shop to the tune of trillions of dollars and still there's no credit and markets are tanking. I'm not saying it's even likely that we'll be 1873 or 1930 again, but I don't think it's v. hard to believe in resemblances between them. More complicated now, sure.

I have no idea whether this crisis really resembles one past crisis or another, but the argument reminds me a bit too much of the one about whether Iraq is more like WW2 or Vietnam or Korea or the Spanish American War or whatever.

we all gonna die

So like, just to try to find any ray of hope at all, if this money hasn't actually taken effect yet and its failure is only psychological, is there a chance that once the money does take effect it will slow the crisis a bit?

I remain to be convinced that getting the debt markets moving again is a viable solution to a problem of excessive debt

btw i am really enjoying the term and concept shadow banking system

I remain to be convinced that getting the debt markets moving again is a viable solution to a problem of excessive debt

― Kondratieff, Thursday, October 9, 2008 10:55 PM (3 minutes ago) Bookmark Suggest Ban Permalink

theyre just trying to keep the economy from totally collapsing at this point - nothing so ambitious as eliminating excessive debt

yeah kondratieff liquidity vs. solvency but at the same time if not later, when? you know? i still remained unconvinced that inaction is preferable to action, i guess.

ilxors needin convincin

I do kind of cringe every time I hear someone say that home prices need to stabilize for all this to work. Home prices are still too fucking high and a lot of the homes in these nuCali and nuFlorida type developments aren't worth much at all. Big ugly homes in the middle of nowhere with shit construction and inadequate demand.

Like sorry guys, but the starbucks around the corner closed and folks don't have the money to pay for their 50 mile commute, let alone play golf at the new course.

yah housing still def overpriced but its not like all of it is that new exurb type stuff

http://en.wikipedia.org/wiki/Panic_of_1837

lol local news doing man on the wall street interviews - lots head shaking confusion

now bush is speaking - its like hes not even president anymore

I'm feeling that if this solves the liquidity issue it doesn't really address the solvency issue or the debt problem. If this works - how long for? All the things that are wrong would remain wrong, what is to prevent it happening again in 5 years? 2 years? 6 weeks? Sooner or later *somebody* is going to have to start paying it all back. Its been put off for years, maybe decades.

But at the moment looks like no one is buying it anyway - so if this is to try and manage an orderly climbdown, then I can see the logic --- but its a hell of a long way down from here

I think Hurting 2 is correct about asset prices stabilizing. If they stabilize at these high prices surely its just postponing it all. I think prices need to drop a lot further than this

basic solution is for the fed/treasury to tie cash to write-downs. i'm too lazy to link to 1933 wikipedia but that's the idea, no?

yah and obv a soft landing is best - so i dont think we really need to totally sort everything out overnight

http://www.reuters.com/article/businessNews/idUKTRE4988VI20081010

Presume this is going to Iceland but sounds like others in pipeline too. Ireland, UK & Spain the most obvious contenders I guess. France/Italy? rumblings about South Korea...

National Debt Clock runs out of digits http://www.timesonline.co.uk/tol/news/world/us_and_americas/article4910883.ece

Money just done disappeared is hard to mitigate.

http://chart.finance.yahoo.com/c/5y/_/_n225

Whee!

http://www.cphelps.id.au/images/ElToro.jpg

lol at my 401(k) website. they dropped the graph that usually pops up showing the trajectory of the account. "no, trust us, you really don't want to see that."

http://www.choggy.co.uk/gallery/oblivion.gif

yah but doesnt the one i posted look so fucking ridiculous?

it looks like they were trynna sell subprime condos on the side of it

maybe i can find some way to paste that into my 401(k) site.

http://z.about.com/d/cleveland/1/0/3/8/-/-/cliff.jpg

is that the prudential rock

That's Jan. 2007 - Jan. 2009

ftse just below 4000

Guardian reporting today that the UK government can't actually enforce what the banks do with their £50bn at all. Big surprise.

They may not be able to enforce in the strictest sense of the word, but they can threaten them with the prospect of withdrawing the money or not giving it to them in the first place.

I would rather see Kondratieff's point in terms of money supply. We have had a massive and unsustainable balloon in the money supply followed by a massive contraction that probably get's us out of too much inflation. whilst we shouldn't go back to those conditions we have to do something to mitigate the short to medium term effects of that correction, i.e. increase the money supply, quickly and bring it down gently. The pain has to be mitigated now then we think about fixing. Think of this as the shot of morphine for the ride in the ambulance, the amputation comes later.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/

specifically:

http://www.bbc.co.uk/blogs/thereporters/robertpeston/

damnit

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/10/day_of_reckoning.html

http://edition.cnn.com/2008/US/10/08/chicago.evictions/index.html?iref=mpstoryview

man, this sheriff just makes me go all cuddlestein mountain. i immediately thought of david strathairn's sheriff in matewan

xp
And that's 3 in a row. We have a winner!

I'm a lot hung over

http://images.ucomics.com/comics/db/2008/db081009.gif

nvestors looked to extend the frenetic selling on Wall Street Friday, adding to yet another global sell-off on concerns that even low interest rates won't help end the worsening credit crisis. Dow Jones industrials futures plunged 250 points ahead of the opening bell in New York.

The guardian's economics coverage continues to be good through this:

http://www.guardian.co.uk/politics/2008/oct/10/gordonbrown-labour

other than larry elliot on occasion guardian hasnt been that great on this. On the other hand the Times has been ludicrous and abysmal. Telegraph has been better than the Guardian though. In the real world Eoubini and Faber have been good reads. Al-Jazeerav English has been good too (and http://www.maxkeiser.com/). and Peter Schiff on Fox News(!) has been on at this for about 7 years and is a good watch